Separate Opinions

DAVIDE, JR., J.: Although I originally voted with the majority in the challenged Decision of 22 April 1992, in the light of the clearer presentation of the procedural and factual antecedents by the parties in the motion for reconsideration and the opposition thereto and the pleadings they thereafter filed, as well as in their expositions during the oral arguments on the said motions and opposition, I am convinced that cogent reasons exist for the reconsideration of the challenged decision and the rendition of another dismissing, nevertheless, these petitions on other grounds.

Lot No. 671 of the Piedad Estate, with an area of 184,268 sq. meters, was originally registered in the name of the Philippine Government which was issued Original Certificate of Title No. 614. Although Lot No. 671 was in the possession of Policarpio de la Cruz who was given priority or preference in its acquisition, it appears that he sold it to Eugenia de la Paz and Dorotea de la Cruz as evidenced by Entry No. 3241; accordingly, a new title, Transfer Certificate of Title (TCT) No. 40355, was issued to the said vendees. On 29 November 1941, Dorotea and Eugenia sold Lot No. 671 to Lucia de la Cruz. Although Lucia appears to have filed with the Office of the Register of Deeds on 17 July 1943 the deed of sale in her favor, which was entered as Entry No. 258 on 17 July 1943 as shown on page 7, volume 7, Primary Entry Book of the Registry of Deeds of Manila, there is no showing at all that she also presented to the Register of Deeds the owner's duplicate copy of TCT No. 40355. On the contrary, the said owner's copy of the title remained in the possession of the vendors, Eugenia and Dorotea, because their deed of sale in favor of Amando Clemente for P178,556.40 of a portion of Lot No. 671, described as Lot No. 671-A with an area of 81,160 sq. meters, is the last inscription in the series of transactions annotated at the back of TCT No. 40355. As a consequence of the registration of the deed of sale in favor of Clemente, and considering that Eugenia and Dorotea had earlier subdivided Lot No. 671 into Lot No. 671-A and Lot No. 671-B with the latter having an area of 103,108 sq. meters, TCT No. 40355 was

cancelled and TCT No. 16212 and TCT No. 16213 were issued for Lot No. 671-A and Lot No. 671-B, respectively. Lot No. 671-B was later sold by Eugenia and Dorotea to Narcisa de Leon, as a consequence of which TCT No. 16213 was cancelled and a new TCT No. 2009 was issued to the vendee. On 6 May 1964, Narcisa de Leon sold Lot No. 671-B To Nieves Paz Erea to whom was issued TCT No. 79971. The latter's action to quiet title against Lucia de la Cruz ended in a compromise settlement under which Lucia paid Nieves the sum of P250,000.00. Armando Clemente further subdivided Lot No. 671-A and sold the subdivided lots in 1952 to various vendees, among whom are the petitioners. In 1971, Lucia de la Cruz obtained a reconstituted title, RT-58, over Lot No. 671. She then sub-divided the lot into Lot No. 671-A with an area of 30,000 sq. meters, Lot No. 671-B with an area of 4,268 sq. meters, and Lot No. 671-C with an area of 150,000 sq. meters, as a consequence of which TCT Nos. 168320, 168321, and 168322 were issued for the subdivided lots, respectively. On 17 July 1975, Lucia de la Cruz sold to the Iglesia ni Kristo (INK) a portion of Lot No. 671-C with an area of 103,108 sq. meters. Another deed of sale was executed by Lucia in favor of the INK for the remaining 84,356 sq. meters and the transaction was annotated in TCT No. 168322.
LLphil

From the foregoing it would thus appear that there was a double sale of Lot No. 671 by Eugenia and Dorotea, first to Lucia de la Cruz and then to Amando Clemente (Lot No. 671-A) and Narcisa de Leon (Lot No. 671-B). The rights then of the two sets of vendees would be determined pursuant to Article 1544 of the Civil Code which reads:
"ART. 1544.If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and in the absence

thereof, to the person who presents the oldest title, provided there is good faith."

It may be presumed that both sets of vendees were in good faith in the purchase of the immovable in question. As to who of them first registered the sale in the Registry of Deeds is the more crucial issue. Although there is evidence that the sale in favor of Lucia de la Cruz was entered in the primary entry book of the Registry of Deeds of Manila on 17 July 1943, the owner's copy of TCT No. 40355 was not presented to the said office. For that reason, the sale was not annotated on TCT No. 40355 and, thus, no new TCT was issued to Lucia. The rule in this jurisdiction under the Land Registration Act (Act No. 496) is that in voluntary dealings with registered lands, the mere entry of the document (e.g.,deed of sale) does not operate to convey and affect the land sold unless the owner's duplicate copy of the certificate of title is surrender and the fees paid. Expounding thereon, in Villasor vs. Camon (89 Phil. 404, 407-412 [1951]), this Court, through Mr. Justice Felicisimo Feria, made the following enlightening disquisition on the rule and its non-applicability to involuntary dealings with registered lands:
"(a)The question raised in the third assignment of error which we have to decide, is whether the mere registration by the Register of Deeds in the entry or diary book of the exhibit "A" in which the defendant Camon sold or assigned all his rights and interests in the lot in question, without the presentation of the duplicate certificate of the owner for the annotation of such assignment thereon and on the original certificate, had the effect of a conveyance of the said lot to the plaintiff and a notice thereof to all other persons from the time of such registering, filing, or entering, under Sections 50 and 51 of Act No. 496. These two sections provide only for the effect of registration of deeds, mortgage, lease or other voluntary conveyance, as well as of lien, attachment, notice of lis pendens and other involuntary instruments on registered land. But they do not provide for the requisites or conditions for such registration in order to have that effect, which is provided for in the subsequent sections of the same Act, which we shall quote later on in their proper places depending upon whether the instrument to be registered is voluntary or involuntary one. A cursory examination of the provisions of Sections 52, 57, 61, and 64 of Act No. 496 and the decisions of this Court in the cases Fidelity and Surety Co. vs. Pastora Conegero, 41 Phil., 396; Director of Lands vs. Addison, 49 Phil., 19; and Philippine National Bank vs. Fernandez, 61

Phil., 448, clearly show that the answers to said questions must be in the negative. That is, that for the registration of voluntary instruments,

such as the one under consideration, it is necessary, not only to register the deed, instrument of assignment, mortgage, or lease in the entry book of the Register of Deeds, but a memorandum thereof shall also be made by the Register of Deeds on the owner's duplicate certificate and its original.
Section 52 provides that "all interests in registered land less than an estate in fee simple shall be registered by filing with the register of deeds the instrument creating or transferring or claiming such interest and by a brief memorandum thereof made by the register of deeds upon the certificate of title, signed by him. A similar memorandum shall also be made on the owner's duplicate. The cancellation or extinguishment of such interests shall be registered in the same manner." Section 57 prescribes that "An owner desiring to convey in fee his registered land or any portion thereof shall execute a deed of conveyance, which the grantor or grantee may present to the register of deeds in the province where the land lies. The grantor's duplicate certificate shall be produced and presented at the same time. . . . The register of deeds shall not upon the original and duplicate certificates the date of transfer, the volume and page of the registration book where the new certificate is registered, and a reference by number to the last prior certificate." Section 61 provides that "Registration of a mortgage shall be made in the manner following, to wit: The owner's duplicate certificate shall be presented to the register of deeds with the mortgage deed, and he shall enter upon the original certificate of title and also upon the owner's duplicate certificate a memorandum of the purport of the mortgage deed, the time of filing and the file number of the deed, and shall sign the memorandum." Section 64 prescribes that "Lease of registered land shall be registered in the manner provided in section fifty-two of this Act, in lieu of recording." This Supreme Court in the case of Fidelity and Surety Co., vs. Pastora Conegero, 41 Phil., 401, held that 'The steps by which registration is accomplished are fully set out in section 57 of the same Act; and by reference thereto, it will be seen that registration of the transfer of registered land depends upon several vital conditions, among which is the requirement that the grantor's duplicate certificate, upon

which the title is founded, shall be produced before the register of deeds for cancellation; and that he shall also have before him the original certificate, likewise to be cancelled. This prerequisite condition was not complied with when the deed to Thomas was presented for registration. On the other hand, the conveyance of the land covered by certificate No. 194, by way of mortgage to the Fidelity and Surety Company, was effected in compliance with all legal requirements. As a consequence it must be held that the title acquired by the Fidelity and Surety Company is superior to that acquired by Samuel Thomas.' In the case of the Director of Lands vs. Addison, 49 Phil., 19, 26, it was held that 'In fact the register of deeds has no authority to register a conveyance in fee without the presentation of the conveyor's duplicate certificate unless he is ordered to do so by a court of competent jurisdiction (see Land Registration Act, section 55).' And in the case of Philippine National Bank vs. Fernandez, 61 Phil., 448, this Supreme Court ruled that, 'As to the share of Leonor Villaranda, appellant's deed from her could not prejudice third persons, because it was not registered on transfer certificate of title No. 2207 in the office of the register of deeds, and the reason therefor was the failure of the appellant to present the owner's duplicate of said certificate to the register of deeds, as required by section 55 of Act No. 496. The appellant did not therefore acquire any right to the issuance of a new transfer certificate of title in his favor with respect to the interest of Leonor Villaranda (Fidelity and Surety Co. vs. Conegero Vda. de Lizarraga, 41 Phil., 396; Director of Lands vs. Addison, 49 Phil., 19).' Niblack, in his well known book 'An Analysis of the Torrens System of Conveying Land', has the following to say on the necessity of producing the certificate of title: 'Production of Certificate of Title with Instrument Affecting Title. Under the scheme of the Torrens system, and as a protection to the registered owner, the certificate of title must be produced with any voluntary instrument purporting to affect the title. In some acts it is expressly provided that no new certificate of title shall be entered, and no memorandum shall be made upon the register by the register, in pursuance of any voluntary instrument, unless the owner's duplicate certificate is presented with such instrument, except in cases specifically provided for in the act, or upon the order of a court for cause shown. The other acts in this country provide that on the filing of such instrument and the production of the owner's duplicate certificate, the transfer of memorial may be registered. It is evident that under these acts the registrar has no authority to make registration

without the production of the certificate of title with the voluntary instrument. Where there is no specific provision in an act that the production of the owner's duplicate certificate is to be a condition precedent to the right of the registrar to make a registration or a memorial, such provision may be inferred from the other requirements or statements of the act. A requirement that the owner's certificate shall be cancelled when a new registration is made, or that a memorial, when registered, shall be noted on the duplicate certificate, is an implication that the owner's duplicate must be presented before a new registration may be made.' (emphasis ours.) The appellant cannot invoke in support of her contention the ruling laid down in the case of Government of the Philippine Islands vs. Aballe, 60 Phil. 986, which was followed in Director of Lands vs. Abad, 61 Phil., 479. to the effect that an attachment entered upon the entry book is duly registered although the duplicate certificate is not presented at the time of registration to the register of deeds. Appellant cannot invoke said ruling, not because it has been abandoned by the Supreme Court during the Japanese occupation in the case of Bass vs. De la Rama, et al., (1, Off. Gaz., [12] p. 889), in which it was said that 'we are constrained to abandon the ruling in said two cases,' it was not abandoned for the decision was concurred by only two justices or less than a majority, and said statement was not necessary or an obiter dictum and against the law, as correctly stated by the two associate justices who dissented and only concurred in the result, but because said ruling, subsisting and in force, does not support appellant's contention, for it is only applicable to registration of involuntary instruments, such as attachment, or other liens and adverse claims of any description. This ruling is correct or in conformity with the provisions of section 72 of Act No. 496, which do not require the production by the registrant of the duplicate certificate of the land to be affected, and was also followed in the case of National Bank vs. Fernandez quoted supra, in which this Supreme Court in passing upon the second ground of appellant's contention, held the following:' xxx xxx xxx The reason for the difference between the conditions required for the registration of a voluntary and that of an involuntary instrument, is obvious. The law requires the production of the owner's duplicate certificate by the registrant by a voluntary instrument together with the deed or instrument to be registered, because as a voluntary instrument to be registered, because as a voluntary instrument is a willful act of the registered owner of the land to be affected by the registration, it is to be presumed that he is interested in registering the instrument, and would

willingly surrender, present or produce his duplicate certificate of title to the register of deeds in order to accomplish such registration. And this is the reason why the second paragraph of Section 55 provides that 'The production of the owner's duplicate certificate whenever any voluntary instrument is presented for registration shall be conclusive authority from the registered owner to the register of deeds to enter a new certificate or to make a memorandum of registration in accordance with such instrument.' But in case of involuntary instrument such as an attachment, or other lien or adverse claim of any description, as the registration thereof is contrary to the interests of the registered owner or will affect him adversely, it is but natural that he will not willingly present or produce his duplicate certificate or at least delay his production as long as possible. For that reason, the law does not require its presentation together with the involuntary instrument, as in the case of voluntary instrument, and considers the annotation of such instrument upon the entry book as sufficient to affect the real estate to which it relates; . . . ." (emphasis supplied)

In Levin vs. Bass (91 Phil. 419 [1952]), this Court, per Mr. Justice Sabino Padilla, elucidated again on the requirements of effective registration in voluntary dealings of registered land:
"We now take up the question between Eugenio Mintu and Rebecca Levin. Under the Torrens system the act of registration is the operative act to convey and affect the land. [Sec. 50, Act. 496]. Do the entry in the day book of a deed of sale which was presented and filed together with the owner's duplicate certificate of title with the office of the Registrar of Deeds and full payment of registration fees constitute a complete act of registration which operates to convey and affect the land? In voluntary registration, such as a sale, mortgage, lease and the

like, if the owner's duplicate certificate be not surrendered and presented or if no payment of registration fees be made within 15 days, entry in the day book of the deed of sale does not operate to convey and affect the land sold. [Sections 55 and 56, Act 496]. In involuntary registration, such as an attachment, levy upon execution, lis pendens and the like, entry thereof in the day book is a sufficient notice

to all persons of such adverse claim. [Villasor vs. Camon, et al., 89 Phil., 404]. . . ." (emphasis supplied)

Villasor was reiterated in Barreto vs. Arevalo (99 Phil. 771, 777-778 [1956])
where this Court, per Mr. Justice Alejo Labrador, stated:
"The fourth assignment of error has reference to the holding of the trial court that the registration of plaintiff's deed of sale is

incomplete and cannot prevail over the rights of defendants who had secured registration of the deed of sale in their favor and the issuance of a certificate of title in their name. The above conclusion is also correct. In the first place, the act of registration is the operative act to convey and affect the land, an unregistered deed only operating as a contract between the parties and as evidence of authority to the register of deeds to make registration (Sec. 50, Land Registration Act.) The registration of defendants Padillas' deed affected the land conveying title thereto to them, as in fact a new certificate of title was issued in their favor. As to plaintiff's deed of sale, as to which registration is voluntary,

not involuntary, its presentation and entry in the day book without surrender of the title, did not operate to convey and affect the land sold or conveyed (Villasor vs. Cammon, et al., CA. G.R. No. 8551, prom. June
29, 1951)." (emphasis supplied)

To recapitulate, since Lucia de la Cruz was not able to present to the Register of Deeds the owner's duplicate copy of TCT No. 40355 which had all the time remained in the possession of her vendors until it was cancelled upon the registration of the deed of sale in favor of Amando Clemente, she cannot claim any better right to the property against the second vendees simply because she was the first to present her deed of sale to the Register of Deeds. On the other hand, Clemente registered the deed of sale in his favor in August of 1951 or twenty (20) years before Lucia de la Cruz secured a reconstituted title over Lot No. 671. The compromise agreement between Erea and Lucia de la Cruz under which the latter had to pay the former P250,000.00 for Lot No. 671-B with an area of 103,108 sq. meters, which is the very same area Lucia sold to INK on 17 July 1975, is further proof that Lucia had a weak claim over the property. If it were otherwise, she would not have parted with P250,000.00 to reacquire it. That was not at all a picayune sum.
prLL

Consequently, the second paragraph of Article 1544 of the Civil Code does not help the cause of Lucia de la Cruz. Even granting that the claim of Lucia de la Cruz should prevail over that of Clemente by reason of the prior registration in good faith of the deed of sale in her favor, the fact remains that at the time she sold the 103, 108 sq. meters and then later the remaining 84,356 sq. meters to the INK, the portion acquired earlier by Clemente had already been sold to different vendees to whom separate TCTs were regularly issued. These facts were readily available to the INK from the Office of the Register of Deeds of Quezon City which kept the original copies of the TCTs issued to the

vendees of Clemente. It is interesting to note that the sale in favor of the INK over the remaining 84,346 sq. meters was annotated only in TCT No. 168322 for Lot No. 671-C. Such a sale could logically cover the lot purchased by Clemente because the earlier sale to INK of 103,108 sq. meters was taken from Lot No. 671-C which has an area of 150,000 sq. meters. It is then equally clear that the registration of the deeds of sale in favor of the INK were also posterior to that of the vendees of Clemente. As to who acted in good faith whether the INK or the said vendees is a question which should be threshed out in an appropriate action or proceeding.

Additionally, the petitioners claim that they are in possession of the property. The INK does not vehemently deny this claim. In any case, the issue of possession is thus raised, a crucial one in double sale. It has also been shown that the petitioners were not parties in De la Cruz vs. de la Cruz (130 SCRA 666 [1984]). I fully agree with Madame Justice Flerida Ruth P. Romero that the said case cannot operate as res judicata against them. All the foregoing factual issues related to double sale must have to be resolved in an appropriate proceeding before a proper court. ACCORDINGLY, I vote to grant the Motion for Reconsideration and set aside the challenged Decision of 22 April 1992, but to dismiss these cases without prejudice on the part of the petitioner in G.R. No. 76265 to institute the appropriate action to protect her rights and on the part of the petitioners in G.R. No. 83280 to prove their priority of rights in Civil Case No. Q-49900.

Feliciano, J ., concurs.
ROMERO, J., dissenting: In this motion for reconsideration filed by petitioners, we are again called upon to take a second look at our decision in Calalang v. Register of Deeds of Quezon Citydated April 22, 1992, 1 which dismissed petitioners' action for lack of merit. In said decision, we re-applied the facts as settled in the earlier De la Cruz v. De la Cruzcase dated July 25, 1984 2 since the facts of the latter case continue to be the facts before us now. On May 13, 1992, petitioners filed the instant motion for reconsideration with the prayer that they be heard en banc. After requiring respondents to comment, we

granted petitioner's prayer for oral argument before the Third Division and set the hearing on October 12, 1992. After hearing the arguments of all the parties, the Third Division resolved to require petitioners and respondent to file their respective memoranda. 3 Subsequently, on February 10, 1993, the instant case was referred by the Third Division to the Court en banc; 4 having been accepted by the Court en banc, the case became an en banc one.
cdrep

Before we proceed to a re-examination of our decision, I wish to reiterate that the instant case was accepted by the Court en banc because it is high time that the Court, sitting en banc, definitively resolve the uncertain status of more than 100 Transfer Certificates of Title and their derivatives 5 which were all traceable to TCT no. 16212 issued in favor of Amando Clemente. It is my position that the doctrine of res judicata should not have been applied to the instant Calalang case vis-a-vis the earlier De la Cruz case as to bring about the dismissal of petitioner's action for lack of merit. It is the contention of petitioners that the De la Cruz case is not applicable inasmuch as, being an action in personam, it is binding only upon the parties involved therein, namely, Agustina de la Cruz et al., Lucia de la Cruz and Iglesia Ni Kristo (INK). To recall, the De la Cruz case was an action to recover possession and ownership filed by Agustina against Lucia de la Cruz as predecessor-ininterest of INK. With respect to the object against which the said action was directed, such action is classified as an action in personam because its objective was to establish a claim or liability against Lucia de la Cruz for conveying to INK, a parcel of land which Agustina and her co-plaintiffs claimed was a part of their inheritance in the estate of their grandfather, Policarpio de la Cruz. Although an action to recover a parcel of land is a real action since it concerns a right over real property, such action is an action in personam in the sense that its judgment binds only particular parties, the latter having been the only ones heard before the Court. 6 To repeat, a real action may at the same time be an action in personamand not necessarily an action in rem. 7 An action to recover possession of real property is not an action in rem or an action against the whole world, like a land registration proceeding or probate of a will; it is an action in personam, such that a judgment therein is binding only upon the parties properly impleaded and duly heard or given an opportunity to be heard. 8 Accordingly, since the petitioners herein were not impleaded in

the De la Cruz case, the same has no binding effect upon petitioners in this present controversy. Our decision in Calalang v. Register of Deeds which heavily relied on the doctrine of res judicata in upholding INK's claim over Lot 671-C cannot be applied because for res judicata to apply, there must be among other requisites, identity of parties and cause of action. 9 This we fail to see in the instant case vis-a-vis the De la Cruz case. We cannot consider petitioners herein as "successors-in-interest by title subsequent to the commencement of action" 10 because petitioners' transfer certificates of title were obtained prior to the institution of the action to recover ownership and possession by Agustina de la Cruz in 1975. Note that petitioners obtained their respective titles after the 1952 sale by Dorotea de la Cruz to Amando Clemente, predecessor-in-interest of petitioners, who developed the lot into a subdivision. The lack of identity of parties is underscored by the fact that not one of the petitioners in the instant case was joined as a party in the De la Cruz case, although they were already real parties in interest at the time, having constructed buildings on the disputed property after 1952 and before 1975. An action for recovery of possession and ownership should be maintained against the actual or legal possessors of the property, for such persons are real parties in interest bound by the judgment which may be rendered in that action. 11 In fact, had the 1984 suit of Agustina de la Cruz against properties of Lucia de la Cruz prospered, petitioners herein as actual possessors since 1952 would undeniably sustain damages. Clearly, petitioners, as real parties in interest, have a real, actual, material and substantial interest, 12 for they would have lost their lots and houses if the claim of Agustina had been sustained. Furthermore, res judicata is not applicable to the case at bar because there is no identity of causes of action between the De la Cruz case and the instant petition. In the De la Cruz case, the cause of action was for the recovery of possession against Lucia which was anchored on the issue of whether or not a trust and/or co-ownership existed between Lucia de la Cruz and the heirs of Maximo and Filomeno de la Cruz. Thus, the Court principally examined the evidence presented by Agustina de la Cruz and her co-petitioners to prove their claim that they had been defrauded by Lucia de la Cruz of their inheritance from their grandfather, Policarpio de la Cruz.
LexLib

On the other hand, in the present case, the cause of action is for the quieting of title, which arose from a consulta case wherein the Register of Deeds entertained

doubts regarding the registrability of the Transfer Certificate of Title in the name of Constancio Simangan, the land involved being covered by two sets of titles issued in the names of different owners, one derived from Amando Clemente and the other from Lucia de la Cruz (RT-58). 13 Moreover, conspicuous is the absence of any lis pendens annotated in petitioners' Certificates of Title. Any decision in a case involving any right to land registered under the land Registration Law shall only bind parties thereto unless notice of lis pendens is recorded in the Certificate of Title. 14 A major point to be considered in this reversal is the anomalous primary entry of the deed of sale relating to Lot 671 on July 17, 1943 which had been caused to be made by Lucia de la Cruz in the Day Book of the Register of Deeds of Manila (Entry No. 258, Page 7, Vol. 7). 15 Such entry cannot be considered as the operative act that conveyed the property to her as vendee because the Deed of Sale was not registered in accordance with law. Section 50 of Act 496, 16 then the law in force, provides that, "registration of all voluntary transactions affecting registered lands shall be made in the office of the Register of Deeds for the province or city where the land lies." It is but logical for transactions affecting registered lands to be inscribed in the Register of Deeds of the province or city where the same are located for accessibility and convenience to the parties involved. In the case at bar, this requirement has been glaringly violated. Contrary to the above-cited provision, the inscription of the Deed of Sale was made in the Register of Deeds of the City of Manila instead of in the Province of Rizal. Thereby, Lucia de la Cruz disregarded the existence of TCT No. 40355 Book T201 which had been in the custody of the Register of Deeds of Pasig, Rizal since April 25, 1940 until April 11, 1946 when it was transferred to the Register of Deeds of Quezon City. 17 We cannot accept respondent's allegations that during the Japanese Occupation, registration of transactions, regardless of where the titles were kept, was undertaken by the Register of Deeds of Manila, for that would be tantamount to disregarding the existence of Act 496, a non-political law which continues in force until changed or abrogated by the rightful sovereign, i.e., the Commonwealth of the Philippines and later the Republic of the Philippines. 18 Administrators who are mandated by law to discharge certain ministerial duties may not, with impunity, violate the same law.

Moreover, the primary entry in the day book of the Register of Deeds in favor of Lucia De la Cruz cannot prevail over TCT 40355 because entry in the day book is only a preliminary step in registration while the issuance of a new certificate of title is the final step which produces the effect of registration. In practice, the first and the last steps are not completed within the same day. It is however, of no consequence when actual registration is finally accomplished, for when accomplished, its effect retroacts as of the date of the entry in the day book. But if the issuance of a new certificate of title could not be accomplished at all, the primary entry in the day book automatically loses its force and effect. 19

No evidence is adduced to show that a Transfer Certificate of Title was ever issued to Lucia de la Cruz. The De la Cruz decision merely speculated that one must have been issued to her, thus:
Certificate of Title must have been issued to the new owner, Lucia de la Cruz. The entire records do not disclose the number of the new Transfer Certificate of Title (TCT) in the name of Lucia de la Cruz. When in 1971,
Lucia de la Cruz petitioned for the reconstitution of her title in the Court of First Instance of Manila, she alleged her title as No. (N.A.). The Court granted the petition and the Register of Deeds of Manila issued to her TCT No. RT-58, thereby cancelling TCT-40355, T201." 20 (Emphasis provided) "In due course of official business and duty, a new Transfer

Thus since there was no certificate of title that was issued after the alleged sale in favor of Lucia de la Cruz, then the alleged inscription in the Primary Entry Book in the Registry of Deeds of Manila did not "ripen" into actual registration. As such it cannot prevail over TCT 40355 then in the custody of the Register of Deeds of the Province of Rizal. Article 1544 of the Civil Code relating to the provisions on double sale 21 cannot be made to apply in favor of private respondent INK because a new transfer certificate of title must have been issued after the sale on November 29, 1941 by Eugenia de la Cruz and Dorotea de la Cruz to Lucia de la Cruz (INK's predecessor-in-interest). This is because the preference supposed to be conferred by Article 1544 upon the inscription of the Deed of Sale in Lucia's favor in the Register of Deeds of Manila failed to materialize for reasons already discussed.

Hence, Amando Clemente's procurement in good faith of TCT No. 16212 issued over Lot 671-A on August 9, 1951 must be considered as the first inscription after TCT No. 40335. It is settled that "when two certificates of title are issued to different persons covering the same land in whole or in part, the earlier in date must prevail, and, in case of successive registrations where more than one certificate is issued over the land, the person holding a prior certificate is entitled to the land as against a person who relies on a subsequent certificate." 22 A closer examination of TCT No. 40355 discloses that it was signed by Register of Deeds Teodoro Gonzales on April 25, 1940. 23 The last inscription in the series of transactions at the back shows the sale of Lot 671-A to Amando Clemente on August 1, 1951 for the sum of P178,556.40. In lieu thereof, TCT No. 16212 in Clemente's name and TCT No. 16213 were issued, Clemente obtaining his TCT No. 16212 on August 9, 1951. On the other hand, INK obtained its TCT No. 168322 on July 17, 1975. Consequently, as between the title of Amando Clemente and Iglesia Ni Kristo, who are both claimants to part of the same land, Clemente's earlier certificate of title must prevail. Prior to Clemente's inscription, there was no indication whatsoever of any sale by Eugenia and Dorotea de la Cruz to Lucia de la Cruz in 1941 which respondents claim to have effectively preempted any subsequent dealings on Lot 671, namely the sale in favor of Amando Clemente in 1951. INK's predecessor-in-interest, Lucia de la Cruz, was never able to present a TCT of the land and she claimed to have bought in 1941 from Dorotea de la Cruz and Eugenia de la Paz. Lucia merely caused the cancellation of the original TCT 40355 of her two vendors through the highly questionable entry in the Primary Entry Book (in 1943 of the Register of Deeds of Manila and not in the Register of Deeds of Rizal where the subject land is located, in violation of law. To remedy this anomaly, she got Reconstituted Title RT-58 some thirty (30) years later. Furthermore, to disregard the inscription in favor of Amando Clemente would destroy the value and reliability of the Torrens System which prescribes conclusiveness of all matters contained in a certificate of title issued by the Register of Deeds. Amando Clemente, as an innocent purchaser in good faith, rightly relied on the correctness of the inscriptions at the back of TCT No. 40355. Under the Torrens System, every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the will in no way oblige him to go behind the certificate to determine the condition of the

property. 24 When there is nothing on the face of the title to indicate any cloud or vice in the ownership of the property or any encumbrances thereon, a purchaser is not required to explore further than what the Torrens Title upon its face indicates, in quest for any hidden defect or inchoate right that may subsequently defeat his right thereon. 25 Since the inscription of the Deed of Sale in the Registry of Manila was invalid, it follows that the reconstitution of the same document by Lucia de la Cruz in 1971, 30 years after the sale by Dorotea de la Cruz is perforce invalid, applying the legal maxim that a spring cannot rise higher than its source.
prLL

Moreover, it could not be given effect because it was attended with legal infirmities. Although the De la Cruz case mentions that the "reconstitution proceedings" in 1971 were "duly published," 26 the case does not state that notices were given to adjoining owners as required by Republic Act No. 26. 27 Petitioners insist that they had never received any notice of the reconstitution proceedings. They further allege that it was only in 1986 when INK started putting up "No Trespassing" signs on their property, that they became aware of other claimants to their properties. A reconstitution proceeding is an in rem proceeding. But before it can be treated as such, certain pre-requisites must first be complied with 28 Sec. 12 of R.A. No. 26 expressly requires service of notice of the initial hearing to the adjoining owners and the actual occupants of the land. 29 Said section provides that a petition for reconstitution shall state or contain, among other things, "(e) the names and addresses of the occupants or persons in possession of the property, of the owners of adjoining properties and of all persons who may have interest in the property." The next section mandates the publication of said notice of the petition at the expense of the petitioner and the sending of copies of the notice to parties mentioned in Sec. 12. 30 Notice by publication is insufficient as regards actual possessors of the property. It cannot be overemphasized that notice is jurisdictional and lack of it deprives the court of authority to make a valid decree. 31 In petitions for reconstitution of titles, actual owners and possessors of the lands must be duly served with actual and personal notice of the petition. 32 Needless to say, since publication, in and of itself is insufficient, the reconstitution of TCT RT No. 58 in favor of Lucia de la Cruz was necessarily invalid. Hence, when Lucia de la Cruz sold the disputed property on July 17, 1975, she was in no position to transmit any dominical rights to her vendee Iglesia ni Kristo.

ACCORDINGLY, I vote to GRANT the petitioners' motion for reconsideration, without prejudice to litigating anew in another appropriate proceeding the issues of overlapping of titles among various claimants and of good faith on the part of the Iglesia ni Kristo.

Feliciano, J ., concurs.
QUIASON, J., concurring and dissenting: I concur with the Resolution insofar as it dismisses the petition in G.R. No. 76265 and denies the petition in G.R. No. 83280. My reason is that the basic issue which of the conflicting duplicate transfer certificates of title shall prevail could not be raised, entertained and resolved in the proceedings (LRC 1978 and Civil Case No. 45767 of RTC, Branch 101, Quezon City) subject of the petitions. The conflicting transfer certificates of title are TCT No. 16212 issued to Armando Clemente on August 9, 1951 and TCT No. RT-59 (purported to be a replacement of TCT No. 40355) issued to Lucia de la Cruz in 1971 after a reconstitution proceeding. Both duplicate transfer certificates of title trace their progeny from TCT No. 40355, which was issued in the names of Eugenia de la Paz and Doretea de la Cruz in 1940.
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G.R. No. 76265 is a petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court to reverse and set aside the decision of the Administrator of the National Land Titles and Deeds Registration Administration (NLTDRA) in Consulta Case LRC 1978. As held by the NLTDRA Administrator himself, he could not accede to petitioner's request for an investigation of the supposed anomaly in connection with the reconstitution of TCT No. RT-59 because the issue raised by petitioner was litigious in nature and cannot be decided in the consulta case. The Court agreed with the NLTDRA Administrator when he stated:
"Undeniably, the arguments and issue raised by petitioner require adjudication of facts which, under the circumstances of this case, we are not prepared to do so as this Court is not a trier of facts. Moreover, the present petition is not the proper remedy in challenging the validity of certificates of titles since the judicial action is a direct and not a collateral attack" (208 SCRA 229, 224).

G.R. No. 83280 is a petition for review on certiorari under Rule 45 of the Revised Rules of Court to reverse and set aside the decision of the Court of Appeals (CAG.R. SP No. 08146), affirming the dismissal of petitioners' complaint to enjoin

private respondent Iglesia Ni Kristo from fencing the lots bought by petitioners from Armando Clemente. The Court quoted with approval the holding in Natalia Realty Corporation v. Vallez, 173 SCRA 534 (1989), that a certificate of title cannot be questioned collaterally since Section 48 of the Property Registration Decree provides that such title can be altered, modified or cancelled only in a directed proceeding in accordance with law (208 SCRA 229, 244).

I dissent insofar as the Resolution holds that the issue of the ownership of the title to the lots in question had been conclusively adjudged in favor of Lucia de la Cruz in De la Cruz v. De la Cruz, 130 SCRA 666 (1984) and could no longer be relitigated under the principle of res judicata.

Res judicata does not apply because there are no identity of parties and no
identity of causes of action, both being indispensable requisites before said principle becomes operative (Abes v. Rodil, 17 SCRA 822 [1966]).

In 61969, the petitioners, who were the plaintiffs in Civil Case No. 20942 of the Court of First Instance of Rizal, were Augustina de la Cruz and the other heirs of Policarpio de la Cruz and Luciana Rafael; while the respondents, who were the defendants in said civil case, were Lucia de la Cruz and the Iglesia Ni Kristo. In G.R. No. 76265, the property who sought to nullify the titles of respondents Lucia de la Cruz and the Iglesia Ni Kristo was petitioner Virginia Calalang. The latter is not a privy of Augustina de la Cruz nor is she an heir of Policarpio de la Cruz and Luciana Rafael. Neither are petitioners Augusto M. de Leon, et al., in G.R. No. 83280 privies of Augustina de la Cruz nor heirs of Policarpio de la Cruz and Luciana Rafael.
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The plaintiffs in Civil Case No. 20942 of the Court of First Instance of Rizal and petitioners in 61969 brought the action as heirs of Policarpio de la Cruz and Luciana Rafael to demand their rightful share in the inheritance allegedly usurped by Lucia de la Cruz. The petitioners in G.R. Nos. 76265 and 83280 claim to have derived their titles from Armando Clemente, who in turn derived his title from Eugenia de la Cruz and Dorotea de la Cruz. The principle action was to enjoin the Iglesia Ni Kristo from fencing the lots occupied by the plaintiffs, the declaration of who of the parties had a superior title being incidental.

I wonder no end how the Court arrived at its conclusion that "the petitioners can not raise anew the question of ownership of Lucia de la Cruz over lot 671 which had been determined by the Court of Appeals and affirmed by the Supreme Court in the de la Cruz Case," after it acknowledged that a judicial determination of right or fact (citing Church Assistance Program, Inc. v. Sibulo, 171 SCRA 408 [1989]) is conclusive only "upon the parties and those in privity with them in law or estate" (208 SCRA 224, 225). I can not accept the assertion of the Court that the De la Cruz decision should be applied to the present cases "since the facts on which such decision was predicated continue to be the facts of the case before us now," after it admitted that it could not pass upon the controversial facts raised by the petitioners (supra, pp. 225 and 229). It is markworthy that there was no mention in the De la Cruz decision of the cancellation of TCT No. 40355 and the issuance of a new transfer certificate of title in favor of Armando Clemente on August 9, 1951. Such vital facts were never brought to the attention of the Court in the De la Cruz case; otherwise, the Court could have made a determination of which certificate of title shall prevail the title issued in 1951 to Armando Clemente or the one issued in 1971 to Lucia de la Cruz. Indeed, there are so many other factual questions that have just been glossed over due to the facile application of the principle of res judicata in the Decision sought to be reconsidered and in the Resolution denying the motion for reconsideration. We shall mention only the most intriguing ones: (1)If the parcel of land in question was in the possession of Policarpio de la Cruz and Luciana Rafael, why was it registered under the Torrens system on April 25, 1940 in the names of Eugenia de la Paz and Dorotea de la Cruz? (2)Who were Eugenia de la Paz and Dorotea de la Cruz? (3)Why did Augustina de la Cruz claim title from Policarpio de la Cruz and Luciana Rafael and not from Eugenia de la Paz and Dorotea de Cruz?
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(4)If Lucia de la Cruz bought the parcel of land covered by TCT No. 40355 from Eugenia de la Cruz and Dorotea de la Cruz in 1941, did the vendors deliver to her the corresponding transfer certificate of title?

(5)If the transfer certificate of title was delivered to Lucia de la Cruz, did she surrender the title to the Register of Deeds when she registered the deed of sale in her favor on July 15, 1943? (6)If she surrendered the transfer certificate of title, did the Register of Deeds cancel the original transfer certificate of title and issue a new transfer certificate of title to her? (7)Why was the proceeding instituted by Lucia de la Cruz in 1971 for the reconstitution of TCT No. 40355, if the parcel of land covered by such title and had already been transferred to her in 1941? (8)Why was the transfer certificate of title issued to Armando Clemente in 1951 derived from TCT No. 40355 if the said title had been cancelled in 1943? (9)Were the lot buyers from Armando Clemente notified of the reconstitution proceedings instituted by Lucia de la Cruz in 1971? All of these factual issues, and many more, have to be threshed out in the appropriate case before we can decide which of the conflicting transfer certificate of title shall prevail.

Feliciano and Kapunan, JJ ., dissent.

VITUG, J., concurring and dissenting: I share the views expressed by Mr. Justice Camilo Quiason in his concurring and dissenting opinion. I just should like to add, by way of clarification, that while, as Justice Quiason states, "a certificate of title cannot be questioned collaterally since Section 48 of the Property Registration Decree provides that such title can be altered, modified or cancelled only in a direct proceeding in accordance with law" (citing Natalia Realty Corporation vs. Vallez, 173 SCRA 534; Calalang vs. Register of Deeds of Quezon City, 208 SCRA 229, 244), when, however, the certificate of title is void ab initio (such as one that proceeds from a void judgment or from a free patent issued on land already privately owned), the title may also be attacked collaterally (Agne vs. Director of Lands, 181 SCRA 793; Estoesta, Sr. vs. Court of Appeals, 179 SCRA 203).